On February 6th, 2018 SpaceX launched a Tesla Roadster on a Mars crossing
orbit. We perform N-body simulations to determine the fate of the object over
the next several million years, under the relevant perturbations acting on the
orbit. The orbital evolution is initially dominated by close encounters with
the Earth. The first close encounter with the Earth will occur in 2091. The
repeated encounters lead to a random walk that eventually causes close
encounters with other terrestrial planets and the Sun. Long-term integrations
become highly sensitive to the initial conditions after several such close
encounters. By running a large ensemble of simulations with slightly perturbed
initial conditions, we estimate the probability of a collision with Earth and
Venus over the next one million years to be 6% and 2.5%, respectively. We
estimate the dynamical lifetime of the Tesla to be a few tens of millions of
years.

...For me it was how to approach the profit possibilities; much in the same
way Grandmother would quiz: "Your initial conditions are 'The sky is
falling, the sky is falling', what is your course of action?" to which
I'd reply "I'm this many: ||||, four" and she'd say, "No silly, your
course of action is 'Short sky'"

Twenty-seven engines on the Falcon Heavy rocket, all burning their happy little flames.

One may criticize the Falcon Heavy rocket for having a short launch
manifest, as it has only two confirmed flights in the next year or so.
There just aren't that many commercial customers right now for the
heavier-lift rocket when a cheaper Falcon 9 or another medium-lift class
of booster will suffice. But when one considers the more extreme
cases—such as big Department of Defense missions to geostationary orbit
or potential human exploration plans—the Falcon Heavy shines.

Now that SpaceX's new rocket is finally flying,
we can directly compare costs between this new booster and an existing
rocket in its class, the Delta IV Heavy, as well as NASA's upcoming
heavy lift booster, the Space Launch System. And upon direct comparison,
the cost disparities are sobering, proving that commercial development
of large rockets likely represents the future of the industry.

Delta IV Heavy
The Falcon Heavy rocket, with reusable side boosters, costs $90
million. For a fully expendable variant of the rocket, which can lift a
theoretical maximum of 64 tons to low-Earth orbit, the price is $150
million. While it is not certified yet, SpaceX says its rocket can hit
all Department of Defense reference orbits; however big and gnarly the
military wants to build its satellites, and whatever crazy orbit it
wants to put them into, the Falcon Heavy can do it.

Only the Delta IV Heavy rocket, manufactured by the United Launch
Alliance, also has this capability today. It is more expensive, but how
much more is a matter of some debate. On Twitter this week, the chief
executive of the Colorado-based rocket company, Tory Bruno, said
the Delta IV Heavy costs about $350 million per flight. This figure,
however, is strikingly lower than what Bruno cited during a congressional hearing in 2015, when he asserted that, "A Delta IV, depending on the configuration, costs between $400 and $600 million dollars."

Moreover, the costs referenced above by Bruno exclude a "launch capability contract" worth about $1 billion annually,
which the US government pays exclusively to United Launch Alliance.
Based upon current law, this contract payment will phase out in 2019
(for Atlas rockets) and 2020 (for Delta rockets), which should increase
the costs allocated to each mission. Finally, in 2019, United Launch
Alliance will make the last flight of a Delta IV Medium rocket. Once
this variant is retired, all of the Delta's fixed costs will fall on the
Heavy variant. This will push the per-flight cost above $600 million,
and perhaps considerably higher, in the early 2020s.

The bottom line is that the Falcon Heavy is a more powerful rocket than
the Delta IV Heavy, and by various measures the latter will probably
soon cost the US government about five times as much. Put another way,
the Department of Defense may have to pay half a billion dollars more for a single launch of certain military satellites on the Delta IV Heavy versus the Falcon Heavy....MUCH MORE

Following futures positions of non-commercials are as of February 13, 2018.

10-year note: Currently net short 296.9k, down 30.6k.

If 10-year Treasury yields (2.88 percent) reach three percent – or
even where they are currently – would/could that be used as an
opportunity to go long bonds? Possibly – at least near term. In fact,
they did tag 2.93 percent Thursday before coming under slight pressure.

Yields have come a long way in a short span of time. As early as
September 7 last year, they were 2.03 percent. Not surprisingly, on
nearly all timeframe, they have entered – or soon will – overbought
territory. On the weekly chart, there have been back-to-back
long-legged dojis.

The level to watch on the way down is 2.62 percent, which also
represents the neckline of a reverse-head-and-shoulders pattern. Yields
broke out of that resistance-turned-support a month ago. If it is a
genuine breakout, in due course they could be headed toward 3.9
percent. Hence the significance of how bond vigilantes act around that
level...

We're with Popper and Feynman on the overarching premise: If what you're doing isn't falsifiable, if what you're doing isn't replicable, what you're doing isn't science.
And if what you're doing was funded by the public in any way the law should consider the resulting code to be owned by the public.
There, three different concerns dispensed with in two sentences.
Next!

From Futurism:

In BriefMost AI researchers don't report the source code of the AI programs they use, or the data that AI are trained on. That means other scientists can't reproduce their results — and may make it harder to implement AI more broadly.

The specter of replication

The field of artificial intelligence (AI) may soon have to face a
ghost that’s haunted many a scientific field lately: the specter of
replication. For a research study to be considered scientifically
robust, the scientific method says that it must be possible for other
researchers to reproduce its results under the same conditions. Yet
because most AI researchers don’t publish the source code they use to
create their algorithms, it’s been largely impossible for researchers to
do that.

Science magazine reports that
at a meeting of the Association for the Advancement of Artificial
Intelligence (AAAI), computer scientist Odd Erik Gundersen shared a
report that found only six percent of 400 algorithms presented at two AI
conferences in the past few years included the algorithm’s code. Only
one in three shared the data they used to test their program, and just
half shared a summary that described the algorithm with limited detail —
AKA “pseudocode.”
Gundersen says that a change is going to be necessary as the field grows. “It’s not about shaming,” he told Science. “It’s just about being honest.”

harmful secrecy
Replication is essential to proving that the information an
experiment produces can be used consistently in the real world, and that
it didn’t result randomly; an AI that was only tested by its creators
might not produce the same results at all when run on a different
computer, or if fed different data. That wouldn’t be very helpful at all
if you were asking that AI to do a specific task, whether that’s search
for something on your phone or run a nuclear reactor. You want to be assured that the program you’re running will do what you want it to do....MORE

Filling gaps on charts often, though not always, is akin to permission for the price to "carry on" the move that caused the gap in the first place. Filling gaps up means be alert to the up-move continuing and vice versa, if you prefer your vice, versa.

From Slope of Hope:

Through the Lens of Gaps

The week of February 5 was devastating for the bulls. The week of
February 12 was devastating for the bears. I have a feeling that the
shortened week we’re approaching after Presidents’ Day will have the
torch back in bear hands. Sure, we might have a little more strength,
but we are so deliciously close to major gap fills, I am looking ahead
to next week with anticipation (and, admittedly, some anxiety). These
markets, in spite of having greatly different components, all pretty
much look the same.

A new study challenges one of the most celebrated and controversial ideas in network science.

A paper posted online
last month has reignited a debate about one of the oldest, most
startling claims in the modern era of network science: the proposition
that most complex networks in the real world — from the World Wide Web
to interacting proteins in a cell — are “scale-free.” Roughly speaking,
that means that a few of their nodes should have many more connections
than others, following a mathematical formula called a power law, so
that there’s no one scale that characterizes the network.

Purely random networks do not obey power laws, so when the early
proponents of the scale-free paradigm started seeing power laws in
real-world networks in the late 1990s, they viewed them as evidence of a
universal organizing principle underlying the formation of these
diverse networks. The architecture of scale-freeness, researchers
argued, could provide insight into fundamental questions such as how
likely a virus is to cause an epidemic, or how easily hackers can
disable a network.

Over the past two decades, an avalanche of papers has asserted the scale-freeness of hundreds of real-world networks. In 2002, Albert-László Barabási — a physicist-turned-network scientist who pioneered the scale-free networks paradigm — wrote a book for a general audience, Linked, in which he asserted that power laws are ubiquitous in complex networks.

“Amazingly simple and far-reaching natural laws govern the structure
and evolution of all the complex networks that surround us,” wrote
Barabási (who is now at Northeastern University in Boston) in Linked.
He later added: “Uncovering and explaining these laws has been a
fascinating roller coaster ride during which we have learned more about
our complex, interconnected world than was known in the last hundred
years.”

But over the years, other researchers have questioned both the
pervasiveness of scale-freeness and the extent to which the paradigm
illuminates the structure of specific networks. Now, the new paper
reports that few real-world networks show convincing evidence of
scale-freeness.

In a statistical analysis of nearly 1,000 networks drawn from
biology, the social sciences, technology and other domains, researchers
found that only about 4 percent of the networks (such as certain
metabolic networks in cells) passed the paper’s strongest tests. And for
67 percent of the networks, including Facebook friendship networks,
food webs and water distribution networks, the statistical tests
rejected a power law as a plausible description of the network’s
structure.

“These results undermine the universality of scale-free networks and
reveal that real-world networks exhibit a rich structural diversity that
will likely require new ideas and mechanisms to explain,” wrote the
study’s authors, Anna Broido and Aaron Clauset of the University of Colorado, Boulder.

Network scientists agree, by and large, that the paper’s analysis is
statistically sound. But when it comes to interpreting its findings, the
paper seems to be functioning like a Rorschach test, in which both
proponents and critics of the scale-free paradigm see what they already
believed to be true. Much of the discussion has played out in vigorous Twitter debates.

Supporters of the scale-free viewpoint, many of whom came to network
science by way of physics, argue that scale-freeness is intended as an
idealized model, not something that precisely captures the behavior of
real-world networks. Many of the most important properties of scale-free
networks, they say, also hold for a broader class called “heavy-tailed
networks” to which many real-world networks may belong (these are
networks that have significantly more highly connected hubs than a
random network has, but don’t necessarily obey a strict power law).

Critics object that terms like “scale-free” and “heavy-tailed” are
bandied about in the network science literature in such vague and
inconsistent ways as to make the subject’s central claims unfalsifiable.....MUCH MORE

It was 9 am, a blustery morning, and the deck was a flurry of activity as ships arrived from shore to provision the vessel for a voyage to the Mediterranean. Its mission was to break the French and Spanish blockade of the vital British garrison on Gibraltar. The Crown was fighting a war on two fronts, against ancient rivals in Europe and its rebellious American colonies across the Atlantic. The Royal George could prove decisive. With its speed and complement of cannons, the ship was one of the most fearsome weapons in Britain’s navy. A veteran of many wars, the Royal George rose tall among the fleet, an oak leviathan festooned with acres of sails, the ship’s brass gleaming in the daylight.

In choppy waters, a delivery boat filled with casks of rum pulled alongside the Royal George. On board, wives visited husbands, children said goodbye to fathers, and merchants sold cheap trinkets and watches to the crewmen. Mingling with the sailors were “Spithead nymphs,” women who earned their living servicing men among the berths. On the gun decks, a group of sailors rolled 50 cannons to the centerline to help the vessel heel over, easing the delivery of the rum casks.

But the Royal George failed to hold steady, and the heel steepened. Lieutenant Philip Charles Durham, the officer of the watch, realized that his crew had failed to shut the gunports, now submerged, and the ship was rapidly taking on water. He ordered all hands to run the guns back to their original positions, but it was too late. The sea poured in and the ship was tipped onto its side.

Below decks chaos broke out. Cannons came loose from their lashings, careening down the sloping deck and crushing hundreds of sailors. Visitors and crew were trapped by torrents of chilly seawater rushing through the berths and passages. The ship’s towering masts crashed down onto the rum delivery boat, carving it in half. Those still on the top deck panicked; sailors, women, and children leaped into the water, only to be caught up in the ship’s tangled rigging.

The gunwales disappeared beneath the foaming waves, followed by the top deck, then the forecastle, until the entire ship sank beneath the swell of the sea and settled upright on the seabed 80 feet below. After 10 minutes, only the mast tips remained visible, like fingers grasping for the surface. The events of that morning became one of the worst maritime disasters in British naval history, with more than 900 sailors and civilians lost.

But the Royal George did not disappear from the minds of English mariners, even when settled on the seafloor. Everyone knew that the ship contained a vast fortune—the equivalent of $2.8 million worth of guns, timber, rum, and brass machinery—sitting in silt, just 80 feet from the surface. But in the era before the invention of diving technology, descending to those depths carried the risk of death. Yet the treasure that sank with the lost Royal George continued to beckon, seducing men who were desperate to change the circumstances of their lives.

chapter

2

Charles and John Deane, brothers born four years apart, grew up in a foul dockyard precinct on the edge of London. A former fishing settlement on the Thames, the area had been swallowed by Europe’s largest city. By 1800, it had become a squalid reach of maritime activity and drinking establishments overlooking a fetid waterfront. Locals called the area Deptford Green, but there was nothing green about the landscape of shipyards, slaughterhouses, and candle factories that stained the masonry black. Among the slum’s infamies was the tavern where Christopher Marlowe, one of England’s greatest playwrights, was said to have been stabbed to death in 1593.

It was ironic that the Deane family ended up living in a slum along the shores of England’s largest shipyard. A century earlier, their great-great-grandfather Sir Anthony Deane had been one of the world’s most renowned naval architects. He had spearheaded the construction of the British navy during the reign of Charles II and wrote Deane’s Doctrine of Naval Architecture, 1670, one of the earliest and most influential books on hydrodynamics. His portrait hangs in London’s National Maritime Museum. It was Sir Anthony’s navy that gave Britain unrivaled control of the seas, edging out other European powers. One of Sir Anthony’s 16 children, John, solidified the family’s fame when he was hired by Peter the Great to construct the Russian navy.

But the Deanes’ royal titles and estates had long since been squandered by the time Charles and John were born; their father toiled as a caulker, patching seams in the hulls of ships that his forebears once designed. When the brothers were boys, they were enrolled by their parents as “objects of charity” at the Royal Hospital School. They received a subsidized education, but in return they had to spend seven years as low-paid mariners. The school sought to prepare its charges for the harsh life that awaited them. The 700 students wore naval uniforms and were taught to march in unison. Charles, the older brother, shipped out in 1810 on a merchant vessel at 14 years old. Three years later, John was picked for a plum assignment as a captain’s servant. Charles and John served on many vessels, eventually sailing together to Madras, Bombay, and Macau—all difficult voyages, long months of tilting horizons while en route to distant points in the sprawling British Empire.

During the Deane brothers’ years in the merchant marine, they experienced the enormous hardships of life at sea, crammed together with hundreds of other men, poorly provisioned and tossed by waves. They survived disease and disaster; they saw men receive 300 lashes and witnessed others buried at sea. And, like many poor hands returning home to England and sailing past Portsmouth and the Royal George, they fantasized about the riches below.

In the previous decades, many daring divers had attempted to retrieve sunken treasure in a variety of contraptions—wooden containers, copper jackets, metal canisters. Some died. Others were crippled. One of the men who attempted to reach the Royal George was William Tracey, a successful ship owner who dreamed of even more wealth and constructed a formfitting diving suit out of copper with holes for his extremities and a hose to deliver air from the surface. But when he sailed into Spithead in 1782 and took his suit into the sea, he lasted only a few minutes before resurfacing. “The pressure of the water occasioned my great injury, as it was from that pressure I am now a cripple,” wrote Tracey, who lost all of his money after the misadventure and ended up in Fleet Prison, a grim debtors’ prison in London.

Yet the wreck of the Royal George remained a tantalizing prize, preserved and nearly undisturbed since the day it sank. So it was with all shipwrecks, not just in England but around the world. Since ships first sailed, countless vessels had gone to the bottom, where they remained out of reach. Throughout history, humans were limited to the surface of the sea—and feared the deep. The underwater world was regarded with superstition, a mysterious place where monsters dwelled. Every shoreline marked entry to this immense unconquered frontier, beckoning adventurous souls and, by the early 19th century, clever engineers. They were drawn by the thrill of exploration and the allure of instant fortunes—thousands of years of wealth lost beneath the waves.

chapter

3

After the Deane brothers fulfilled their service as merchant marines, Charles found himself back in Deptford, living just down a dirt road from his childhood home. At 29, Charles was moody, well-worn, and complicated—a loner who had trouble getting work. He struggled to provide for his three children and eventually took a lowly job patching ships’ seams alongside his father.
Desperate to find a way out of poverty, he began sketching an extraordinary new device that would make him rich. Like his ancestors, Charles had a passion and talent for engineering, and he knew that the greatest danger to ships at sea was not water but fire. So he devised an “Apparatus to extinguish Fire in its origin”—a copper helmet riveted to a leather or canvas jacket and fitted with a hose that delivered fresh air from a pump. On his patent application, Charles described his helmet as a

“Machine to be Worn by Persons Entering Rooms or other Places filled with Smoke or other Vapour, for the Purpose of Extinguishing Fire or Extricating Persons or Property therein.”

Charles Deane dreamed up the idea of a smoke helmet for firefighters in 1823

The
idea was promising enough that Charles was able to persuade his
employer at the shipyard to invest 417 pounds in the project, the
equivalent of about $47,000 today. While still working full-time at the
shipyard, he spent a couple years perfecting his invention,
commissioning four prototypes. It was the height of the Industrial
Revolution, whose mechanized wonders and technological innovations were
transforming England and making men wealthy. Charles was sure that his
smoke helmet would propel him into their ranks. He gave demonstrations
wherever he could, but Charles was not a salesman and could not find a
market for his invention. Frustrated, he tossed the helmets onto a shelf
at the shipyard, where they sat for months, ignored and practically
forgotten.

Unlike
Charles, John was gregarious, made friends easily, and excelled at his
work. For several years, he had been largely supporting his older
brother. When John received a plum position aboard an East India ship,
he convinced the captain to hire Charles. When Charles needed money,
John provided it. During their difficult moments—in the harsh naval
school, during their hard times in Deptford—John offered cheerful words
when Charles was low.

While
Charles toiled in Deptford, John lived 60 miles southeast in an
oyster-harvesting village called Whitstable and worked as a “sweeper,”
employed by a salvage company that trolled for lost anchors and other
valuables on the shallow seafloor. Sweeping paid modestly, but it was
reliable work and offered the promise of discovery. One day, John and
his crew would pull up a downed bale of cotton or salvage lumber; the
next, a brass gun or crate of barnacled brandy....

Friday, February 16, 2018

Someone should check in with Victoria "Fuck the EU" Nuland to see what the plan to follow-up on the 2014 regime change in Ukraine was.
Because, despite the fact their first concern is their own energy security, the Poles do have a point regarding their frenemy Ukraine, things could get a bit chaotic for Kyiv if Nord Stream 2 is completed as planned.

Maybe the Ukraine follow-up plan is mixed in the same stack as the follow-up for the "We came, we saw, he died" Libya plan.

Here are three stories on some aspects of the current state of play in Eastern European energy geopolitics.
First up, the Russia-friendly outlet Fort Russ, with the headline article, February 16:

Poland
opposes the construction of the Nord Stream II gas pipeline, because it
considers it necessary to preserve Russia's dependence on gas transit
through Ukraine, Prime Minister Mateusz Moravetski said on Polish Radio."First
of all, this is a political issue and a question of big, serious
threats that may arise in case Poland opposes the construction of the
Nord Stream II gas pipeline, Prime Minister Mateusz Moravetski said on
Polish Radio. [Cf. Angela Merkel's contrasting view]According to him, Warsaw does not want Russia to be able to transport gas to Europe bypassing Ukraine.In addition, Moravetsky, dependence on Ukrainian transit keeps Russia from "aggressive actions.""In
this regard, its aggressive actions in the Donbass, that is, in the
eastern part of Ukraine, are held back to a certain extent by the risk
of what would happen if something bad happened to the pipeline," he
said.Recall,
yesterday Moravetsky said that the construction of Russia's "North
Stream II" is a preparation for an attack on Ukraine. In addition, he
expressed the opinion that "there is no economic meaning in the
construction of the gas pipeline."Also
yesterday, February 15, it was reported that the Polish Law and Justice
party is going to implement the Baltic Pipe project, which involves the
construction of its own gas pipeline along the bottom of the Baltic Sea
in protest against the construction of the Nord Stream II gas pipeline
from Russia to Germany....MORE

Also from Fort Russ, this one dated January 29:

Russia tells the constantly complaining Poland to source its own gas

"For Russia, it does not make sense to keep supplying Poland with gas", wrote Duma deputy Alexei Pushkov on his Twitter page.

President of Poland Andrzej Duda, during a discussion in Davos, said that Poland wants to buy Russian gas on the same terms as Germany.

"Poland will play its games until Russia stops selling it gas entirely - get it from Africa, we don't care. There is no point in appeasing Warsaw," Pushkov wrote.

The Polish state-owned oil and gas company PGNiG buys most of its gas from Russia's Gazprom. The long-term contract with Russia expires in 2022....MORE

For some reason that headline reminds me of Hermann Goering's statement to the assembled Putschers at the Burgerbrau Keller that day in 1923: "Shut up. You've got your beer, haven't you?"No connection of course, except in a crossed-neurons sort of way. It's probably that 'Constantly complaining' bit.With that awkward segue, here's Bloomberg, February 16:

Merkel Defends Russian Gas Link Expansion Protested by Poland

German Chancellor Angela Merkel threw her country’s weight behind the
Nord Stream 2 gas pipeline from Russia, boosting the chances that
the controversial link will become reality.

The
project to boost the capacity of the pipeline has divided EU
governments, with mostly eastern nations led by Poland concerned about
the bloc’s increasing dependence on Russian gas and President Vladimir
Putin’s meddling in Ukraine, which the link would bypass. It also has
highlighted a split between lawyers on the appropriate legal regime for
the pipeline.

Uniper SE, Engie SA, Royal Dutch Shell Plc, OMV AG
and BASF SE’s Wintershall are European partners of Russian gas export
monopoly Gazprom PJSC in the project to expand Nord Stream by 55 billion
cubic meters a year, which would double its capacity to almost 30
percent of current EU demand. The new pipeline potentially deprives
Ukraine and other nations including Slovakia and Poland of transit fees.

“We have different opinions on the topic of Nord Stream,”
Merkel told reporters in Berlin after meeting Poland’s Prime Minister
Mateusz Morawiecki. “We also want that Ukraine continues to have transit
gas traffic but we believe Nord Stream poses no danger to
diversification and should be seen under economic aspects.”

Diversifying Supplies
While
Nord Stream 2 argues a new pipeline is needed to ensure safe supplies
in the coming decades as EU import needs rise, opponents of the project
say it hurts the bloc’s cohesion and weakens the bloc’s Energy Union
strategy aimed at integrating the region’s gas and power markets,
diversifying energy supplies and improving security.

The new German government is considering
the nation’s first liquefied natural gas import terminal as part of
efforts to boost diversification, following similar projects this decade
by Lithuania and Poland.

“Poland has built an LNG terminal that
was supported by the EU and a pipeline to Scandinavia is in planning and
so we’re getting toward diversification,” Merkel said....MORE

Nearly all the major currencies have risen at least two percent against the US dollar this week. The Canadian dollar is an exception. It has risen one percent this week ahead of today's local session. Sterling is becoming another exception after disappointing retail sales. It is up just shy of two percent. The Dollar Index is off 2.3% on the week, which would be the biggest weekly loss since 2015. The dollar has firmed a bit on the European morning, but look for North American operators to see the upticks as a selling opportunity.

The greenback slumped to nearly JPY105.50 in Tokyo, which appears to have led this week's decline. It is the biggest weekly loss since July 2016. Japanese officials are becoming more concerned. Reports suggest a high level meeting today between the BOJ, MOF and FSA on the yen's strength. Although Finance Minister had said earlier this week that the yen's movement did not require intervention, the MOF's point man on FX, Asakawa, expressed greater concern for "one-sided" move that was "not in line with fundamentals."

This still seems to be low level concerns. Reiterating the G7/G20 boilerplate line about "excessive volatility" needs to be avoided, and hints that there are talks among G7 officials about the recent foreign exchange market developments, would be additional rungs on the escalation ladder. Still, we suspect that the Japan's cabinet submission to the Diet of Kuroda's nomination for a second term (leaked in the media for the past several days) and the appointment of two deputies (Amamiya, a key Kuroda ally within the BOJ, and a dovish academic Wakatabe), is not really much of a yen protest. It underscores the continuity of monetary policy. Still nearly half of a Bloomberg survey expect the BOJ to tightened policy late this year.

The euro reached near three-year highs today near $1.2555. It is the sixth consecutive advancing sessions. The euro has appreciated 2.2% this week. The dollar was sold through CHF0.92 to see its lowest level since June 2015. Sterling has been dragged off its high near $1.4145 by the soft retail sales report. It has advanced every day this week and is straddling the unchanged level today. Headline retail sales rose 0.1%. The median forecast was for a 05% gain after a revised 1.4% decline (initially -1.5%). The 1.6% year-over-year pace makes it the weakest January since 2013. But sterling has not been trading higher because the economy is booming. Recall that the January PMIs were all weaker than expected. Sterling may find support ahead of $1.4050.

The RBA's Lowe was equally circumspect on Australian dollar, which is up 2% this week. The Australian dollar has appreciated in 8 of the past ten weeks, and those two losing weeks were here in February. The Aussie has approached the $0.7990 area that houses the 61.8% retracement of recent decline. Lowe said that the trade-weighted index was manageable, and that although he would prefer a lower rather than higher exchange rate, "we are where we are."...

With its new Reply system the firm is taking the art of conversation one step forwards – or should that be backwards?

Are you tired of the constant need to tap on a glass keyboard just to
keep up with your friends? Do you wish a robot could free you of your
constant communication obligations via WhatsApp, Facebook or text
messages? Google is working on an AI-based auto-reply system to do just that.

Google’s experimental product lab called Area 120 is currently
testing a new system simply called Reply that will work with Google’s
Hangouts and Allo, WhatsApp, Facebook Messenger, Android Messages, Skype, Twitter direct messages and Slack.

Reply aims to take the smart AI-based suggested replies that are
available in Google’s Gmail and Allo apps to the next level. In an email
test sent to volunteers, acquired by Android Police,
Area 120 says: “You probably get a lot of chat messages. And you want
to be there for people, but also for people in the real world. What if
replying were literally one tap away?”

The system can apparently work out what people are saying to you and
suggest one-tap answers, but Google says it will go further, taking your
location, your calendar and other bits of information into account. One
example was using your location to send and instant response to “when
can you be home?” using your preferred method of transport and the time
it’ll take to wherever your home is....MORE

Speed modulates the technological landscape:
it converts dynamic flows into conditions of relative stasis; it
overruns emerging developments with a history that has left it behind;
and it transforms the clarity of steady mobilization into a series of
disarticulated blurs.

Speed, once again, is at the center of the competitive cryptocurrency space.

Enter Lightning:

Dubbed a potential game-changer, the Lightning Network is a "secondary" payment protocol that potentially allows for instantaneous micropayments
in Bitcoin and other cryptocurrencies. As transactions would be grafted
onto a layer above the blockchain, significantly increasing its speed
while decreasing its cost, the Lightning Network may serve as a solution
to Bitcoins scalability problem.

Scalability is
an industry-wide issue, as size and frequency limitations compromise
the transactional capacities of just about every functioning
cryptocurrency. With Bitcoin in a position to charge ahead with the new
protocol, other cryptocurrencies are preparing to test or implement
comparable versions of their own.

Litecoin,
whose protocol is perhaps the most similar to Bitcoins, has been
working with Lightning Labs to launch the network simultaneously with
Bitcoin.

Stellar added lightning implementation to its 2018 Stellar Roadmap;
Jeremy Rubin, who currently leads Stellars lightning network
development, states that "It's fairly close to working to the point
where the public can test with real money, but not necessarily at the
point where people can operate a business on it quite yet."

Ethereum is working to implement Raiden, their own secondary payment protocol solution to scale transactions and microtransactions.

NEOs scaling solution is called Trinity
(Trinity State Channels), a payment channel functionality that will
increase its capacity well beyond its already exceptional velocity of
10.000 tps.

ZCash plans to introduce BOLT, a micropayment system that works in alignment with ZCash's anonymity features.

Ripple and Monero are reputed to have begun exploring similar second-level payment technologies.

And alternative solutions are also in the works, as in the case of Grin
(to be launched later this year) which according to Coinbase uses
clever cryptography to construct a blockchain that eats up old, unneeded
data as it grows larger, so it requires much less space in the long
term," and IOTA which claims to have created a blockchain-less blockchain.

Comprised of invite-only chat channels, alien terminology and warning
signs at every turn, the nascent ecosystem springing up around Lightning Network,
the scaling technology that could end up having the greatest impact yet
on bitcoin's capacity, is to date, hopelessly difficult to operate.
"Going to be blunt," one developer wrote, "if you don't know how to
compile something, you probably will have a lot more struggles and a lot
less coins."

Simply put, Lightning in its current state is dangerous to interact
with today. But given the network's big promises - instant transactions
and fees that are next to nothing - risk isn't diminishing the appeal.

Companies like Blockstream are already launching
Lightning-powered stores that send stickers to bitcoin users who
successfully pass funds across the network, while so-called "early
Lightning adopters" are being celebrated online for their "bravery" on
the blockchain.

"Show the world that you were one the first people to use Lightning
on mainnet for a legitimate purchase, if it works," Blockstream's
website reads.

It's a sentiment that, given the risks, has garnered criticism by
some who feel it mistakenly encourages users to risk real money. That
said, there are ways to contribute to the early network without putting
your own funds at risk.

This includes hanging out in the testing environment (where the
majority of Lightning developers are today) or venturing onto the
mainnet (where there's a budding set of best practices, even if pitfalls
remain).

Below, we offer our guide for early adopters who want to get their hands on the bleeding-edge tech before it's recommended....MORE

Finally, here's Elizabeth Stark, Co-founder and CEO of Lightning Labs on Bloomberg TV a couple months ago.
And at the Blockstack Summit last summer:

This is the second part (of two) from Agricultural Economic Insights, January 29:

In a recent article on land values, we began the discussion by examining
cash rental rates and farm financial conditions. This week we look at
farmland valuationCurrent Valuations Remain High
Because of our belief that farmland prices are ultimately driven by
earnings expectations and opportunity costs we frequently examine
farmland valuation with the farmland price to cash rent multiple. This
expresses farmland price as a multiple of current cash rents. In other
words, if the multiple is 25, farmland is priced at 25 times that
current cash rental rate. This valuation measure is shown in Figure 1.

According to the Purdue Farmland Value survey, the 2017 cash rent
multiple for average quality Indiana farmland was 34. This meant that
average quality Indiana farmland was currently being valued at 34 times
the cash rent. As one can see, this is among the highest multiples seen
in the data, but off slightly from recent highs. While this graph is
made from Indiana data, similar multiples would be seen in the USDA data
for most corn belt states. The essential point is pretty clear.
Today, investors are willing to pay more for current earnings than at
most times in history.

There are a variety of reasons that one might be willing to pay a
high multiple. First, you might expect that these current earnings will
grow in the future. For instance, if you expect cash rents to grow
rapidly, paying a high multiple for today’s earnings would be sensible.
However, as we discussed two weeks ago,
current economic conditions don’t suggest that rents will be increasing
rapidly in the near future. In fact, they have been trending slightly
lower. However, one must remember that conditions can change rapidly.
Perhaps investors expect that earnings will increase in the future.

Interest and Capitalization Rates Remain Low
Another reason that people are willing to pay a high multiple for
farmland is that the other options available to them are not attractive
either. We often examine this by looking at interest rates on
alternative investments as a proxy for opportunity costs. If the
opportunity costs for capital are low, investors are often willing to
accept low rates of return on farmland. This is best seen by taking the
inverse of the multiple, which is commonly called the farmland
capitalization rate. It is calculated by dividing cash rent by farmland
prices.

In figure 2 we show the capitalization rates for farmland in three
different states and the interest rate on the 10-year U.S. Treasury
bond. The farmland capitalization rates were calculated from USDA
surveys in Indiana, Illinois, and Iowa. The chart shows that since
roughly 1985, farmland capitalization rates and U.S. Treasury bond rates
have fallen. Today, farmland capitalization rates are slightly higher
than the interest rate on 10-year U.S. Treasury bonds. This strong
relationship provides fairly strong evidence that the high multiples
paid for farmland are a function of the generally declining interest
rate environment of the last 2 to 3 decades. In other words, it appears
that one reason capitalization rates are low (and conversely multiples
are high) is the overall low interest rate environment that we are
experiencing.

How Might Changes Impact Farmland Values?
Another way to look at the relationship between interest rates,
returns, and farmland value is to examine them simultaneously. This
relationship is shown in Figure 3. Here, we graph farmland value on the
vertical axis. Along the horizontal axis are different cash rent
values. The red, blue, and green lines farmland values under different
capitalization rates. These values are found by dividing (multiplying)
the cash rental income on the horizontal axis by the capitalization rate
(multiple). Three capitalization rates 3% (blue), 4% (red), and 5%
(green) are shown.

The black lines (which are labeled) illustrate the current level of
cash rent and farmland values. As one can see the current land value
and cash rental rate intersect the 3% capitalization rate ($6,928/$205 =
3%). One can use this graph to think about what would happen if
capitalization rates or cash rental rates were to change. For example,
if one were to expect higher (lower) rents and a 3% capitalization rate,
land values would move up (down) the blue line....MUCH MORE

Thursday, February 15, 2018

A nuisance to many, this native Appalachian nut is showing some diligent foragers that money can grow on trees.

The first car arrives over two hours before the hulling station
officially opens in Jeffersonville, Kentucky. By the time that Renee
Zaharie appears and starts the hulling machine, four more vehicles have
pulled in and are waiting under the darkening evening sky.
The steady murmur of conversation (and the occasional guffaw) hums
beneath the tent protecting the machine from the elements, as walnut
hullers shoot the breeze after a long day of picking. Occasionally, a
plaintive mew announces the otherwise-silent arrival of one of the 40
cats that Renee and her husband, William, foster. Out front, cars zip by
on the busy county road. All around, the soft chirps of crickets sing
their nightly chorus.

It’s the first weekend of the annual black walnut harvest that takes place each October, and the air is festive.

Money That Grows on Trees
Black walnuts are native to North America (including six Appalachia
states) and, unlike many other tree nuts, grow in the wild. The green,
tennis ball-sized nuts rain onto fields, roads, vehicles and sometimes,
people, presenting a nuisance to cars parked beneath them and a danger
to lawn mowers everywhere.

During
black walnut season in October, the tree nuts rain down everywhere. For
homeowners, they present a nuisance that can damage lawn mowers. Mike
Foight of South Shore, Ky. enlists his grandchildren to clear his yard
(pictured here) and earn some spending money.

While some may dread black walnuts for these reasons, for many
others, the annual harvest is a welcome time of the year: a sign of the
changing seasons, the return of a beloved baking ingredient, and,
perhaps most importantly, an opportunity to earn extra cash.

Black walnut harvesters gather the nuts locally—from their yards,
nearby yards, roadsides and forests—and bring them to one of 238 hulling
stations in 14 states across the country. There, hulling operators use
specialized machinery to remove the hulls (which can make up to half of a
black walnut’s weight), weigh the hulled walnuts, purchase them, and
send them to Stockton, Missouri for shelling and further processing.
Stockton, the unofficial black walnut capital of the world,
is home to Hammons Product Company (HPC), a family-owned business that
has been shelling black walnuts for the past 71 years. The company sets
the price for black walnuts every year. This past October, they paid
$0.15 per pound to walnut pickers, and an additional $0.05 per pound to
hulling stations.

Brian Hammons, the company’s president, says that they produce an
average of 23 million pounds annually and are expecting a bumper crop in
Appalachia this year that will push that figure upwards of 30 million.
After shelling the nuts, HPC sells them raw in grocery stores and
specialty retailers, as well as directly to chefs and ice cream makers
(black walnut ice cream is wildly popular in certain parts of the
country). There’s also an ever-increasing selection of black walnut
products, like black walnut oil, and even myriad uses for the shells,
which can serve as eco-friendly ingredients in sand-blasting agents,
water filtration systems and even sports fields. Every part of the nut
is able to be used....

A new geopolitical confrontation is shaping up in the Middle East,
and not only between Israel and Syria or Iran. Like most conflicts
there, it involves a fight for hydrocarbon resources—oil and gas. The
new focus is a dispute between Israel and Lebanon over the precise
demarcation of the Exclusive Economic Zone between the two countries.
The prime actors at present, in addition to the governments of Israel
and Lebanon include Russia, the Lebanese Hezbollah, Syria, Iran and the
US in the shadows. The latest Israeli attacks on alleged Iranian bases
or Hezbollah camps inside Syria are closely tied to the Israeli aim to
prevent a land link from Iran through Syria to the Hezbollah home-base
infrastructure in Lebanon. The whole situation has the potential to lead
to an ugly wider war nobody wants, at least almost nobody
. .

In 2010 the oil and gas geopolitics of the Mediterranean changed
profoundly. That was when a Texas oil company, Noble Energy, discovered a
huge deposit of natural gas offshore Israel in the Eastern
Mediterranean, the so-called Leviathan Field, one of the world’s largest
gas field discoveries in over a decade. The same Texas company later
confirmed significant gas resources offshore in Cyprus waters near the
Israeli Leviathan, called Aphrodite. Until recently, political paralysis
inside Lebanon and the war in Syria had prevented Lebanon from actively
exploring its offshore gas and oil potential. Now that’s changing. With
the change, the tensions between Israel and Lebanon are escalating, and
Russia is engaging in Lebanon in a bold way.

At a formal ceremony in Beirut on February 9, together with Lebanese
President Michel Aoun, the heads of Total, ENI and Russia’s Novatek
signed the first agreements to drill for oil and gas in the offshore
sector claimed as part of Lebanon’s Exclusive Economic Zone (EEZ). The
event drew a sharp attack from Israeli Defense Minister Avigdor
Lieberman who called Lebanon’s exploration tender “very provocative,”
declaring Lebanon had put out invitations for bids from international
groups for a gas field “which is by all accounts ours.”

The energy tenders from Lebanon take place amid a backdrop of
dramatic new defense relations between Russia and Lebanon, creating an
entirely new political calculus in the Mediterranean region.

The Riches of Levant Basin

What’s clear at this point, after some eight years of exploration
offshore in the Eastern Mediterranean, is that the region is awash with
hydrocarbons, something neither Israel nor Lebanon had previously been
able to find. For Lebanon, to develop its own sources of natural gas
would be a literal godsend. The country has been subjected to
electricity blackouts since the 1975 civil war. The country daily must
experience cuts in electricity, because the peak demand exceeds
production by a large margin. Lacking its own gas or oil Lebanon must
import expensive diesel fuel at an annual loss to the economy of some
$2.5 billion. Lebanon is one of the world’s most indebted countries with
debt to GDP of some 145%. The Syrian war and internal Lebanese
political stalemate have frozen its offshore energy exploration until
now.

A UK company, Spectrum, conducted geophysical surveys in the
offshore Lebanese section of the Levant Basin in recent years, including
3D seismic, and estimated that the Lebanese waters could hold up to 25
trillion cubic feet of economically recoverable gas. Development of
those gas reserves would alter the entire economy of Lebanon. Until now
the war in Syria and political paralysis inside Lebanon had prevented
exploitation of the offshore region.

The prospects are promising enough that an international consortium
led by the giant French Total, Italy’s ENI and Russia’s Novatek, a
private oil company close to Vladimir Putin has stepped forward to bid
for rights to drill. Consortium leader Total has announced the first
well will be drilled next year in Block 4, an undisputed sector, and
that a second well will be in Block 9, the block that falls partly
within an area claimed by Israel. Total was quick to clarify that the
Block 9 drilling would occur more than 15 miles from the disputed zone
claimed by Israel. Despite this, Israel is vehemently protesting the
drilling. Lebanon has an unresolved maritime border dispute with Israel
over a triangular area of sea of around 330 square miles along the edge
of three of its 10 blocks.

Russian buffer between Hezbollah and Israel?

Given the potential for conflict over the energy resources of the
region, it’s no coincidence that just as Lebanon welcomes the
participation of a major Russian oil company, Novatek, in development of
its offshore resources, the Russian government has authorized the
Russian Defense Ministry to prepare a military cooperation treaty that
includes a “comprehensive framework for coordination,” with the Lebanese
military. The framework reportedly includes joint military exercises
and Russian usage of Lebanese ports and airfields as well.

The Russian-Lebanese cooperation reportedly also includes,
“exchanging information on defense means and enhancing international
security capabilities; activating anti-terror cooperation; improving
joint cooperation in the fields of cadre training, military exercises
and armed forces building; exchanging IT expertise; establishing
mechanisms for cooperation between the two countries’ armies.” In short it is major....MORE

“Chocfinger” made his name and his money by taking bold bets on cocoa
markets. But after nearly four decades of trading, sometimes winning,
sometimes losing, Anthony Ward threw in the towel.

Ward blames the rise of computer-driven funds and
high-frequency trading for forcing him and some other well-known
commodities investors to close their hedge funds and look for
opportunities where machines can’t make a difference.

While
computerized trading is not new, Ward and others argue its steady rise
has reached a tipping point that is distorting prices and creating
uncertainty not only for investors, but for chocolate firms, carmakers
and others who rely on commodities.

It was in January
2016, after a slide in cocoa prices, that Ward decided the days of
traditional commodity investors doing well from taking positions based
on fundamentals such as supply and demand may be numbered.

Commodity markets fell across the board that month after
weak factory data in China raised fears of lower demand from the world’s
top consumer of raw materials.

Ward blamed the slide in
cocoa on what he regarded as misplaced selling by computer-driven funds
reacting to the Chinese data, given China has scant impact on the cocoa
market.

“The actual fundamentals in cocoa were
extraordinarily bullish in January 2016. We were forecasting the largest
harmattan in history, which is exactly what happened,” he said.

His
prediction that a hot, harmattan wind from the Sahara desert would hit
harvests in Ivory Coast and Ghana and drive cocoa prices higher did come
to pass - but not before the fund had been forced to cut its losses
when the market slumped.

At the end of 2017, Ward closed the CC+ hedge fund that had invested in cocoa and coffee markets for years.

And
at the end of January, commodity hedge fund Jamison Capital Partners
run by Stephen Jamison closed. He told investors that machine learning
and artificial intelligence had eliminated short-term trading
opportunities, while commodities did not offer obvious benefits in the
long term.

Also in 2017, renowned oil trader Andrew
Hall, who earned $100 million in 2008, called time on his main Astenbeck
Commodities Fund II.

He had said in an earlier letter
to investors that extreme volatility caused by “non-traditional
investors and algorithmic trading” made it difficult to hold onto
long-term positions when the market moved against them.

In
2016, Michael Farmer, founding partner of the Red Kite fund that
specializes in copper, also accused high-frequency traders using
super-fast computers of distorting the market and getting an unfair
advantage....MUCH MORE

The American media landscape, like the rest of the country, is being reshaped by the whims of the ultra-rich

In November, Joe Ricketts, the
billionaire founder of online brokerage firm TD Ameritrade, patriarch of
the family that owns the Chicago Cubs, million-dollar Trump donor, and
father of the governor of Nebraska, shuttered DNAinfo,
the local news startup he founded, and Gothamist, the network of city
blogs he’d purchased just a few months earlier, in a fit of pique, after
editorial employees organized a union. Shuttering the company meant
nothing to him—DNAinfo reportedly lost money and the Gothamist network
was not profitable enough to make an appreciable difference to a man
with a net worth estimated at over $2 billion—but to me it meant that
there was no longer a reporter assigned to cover my neighborhood in
Brooklyn and its Halloween Dog Parades, community board meetings about
unsafe intersections, and new tiki-bar openings.

My loss, I’m aware, is small potatoes compared to that of the
reporter herself, and her dozens of suddenly jobless colleagues. But I
know a little bit about how it feels when a billionaire with
inexplicable power over you takes your job away out of what seems like
personal spite: I was the last editor of Gawker, before it went bankrupt
and ceased publication, the result of years of legal warfare secretly funded by billionaire Facebook investor Peter Thiel.
It is one thing—an infuriating thing, granted—to lose your job
because of “the market.” When your factory shuts down because labor is
cheaper overseas or when your magazine folds because luxury watch
companies shifted their marketing budgets to Instagram influencers, you
may rage and despair, but you also probably saw it coming, in
industry-wide economic trends that were impossible to ignore. But when
your livelihood is disrupted because of the whims of one powerful
person—when the invisible hand is replaced by one very visible and
shockingly capricious one—it is a much more bewildering experience. And
it is one more journalists can expect to experience in the near future,
as the economic power of the 0.01 percent increases and the revenue
models underpinning traditional news-gathering shops break down.

It’s rote at this point to observe that many of the ways the media
landscape has been transformed in the 21st century have oddly caused it
to more closely resemble the media landscape of the 18th and 19th
centuries, from the flourishing of a more openly partisan press to the
erosion of the norms of “professionalism” that were built up in the era
of post-war prosperity and supposed national consensus. Another
throwback: The press baron. Not since the 19th century have so many
individuals had so much power over the press.

It’s important to remember that Ricketts only had that power because
no one else wanted to spend the money to do what he was doing (before he
got mad and decided to stop). He thought he might eventually make money
doing hyper-local reporting across the country, but he hadn’t yet, and
no one else is trying on his scale. That is not meant to suggest he
should be considered a heroic failure, it’s mainly to say that an
industry that relies on the Joe Rickettses of the world to sustain
itself is in deep trouble.

The press baron model works out so long as people want to be press
barons. Generally, billionaires buy or start media outlets either for
money or influence. There are ostensibly benevolent examples, of course.
After personally purchasing The Washington Post,
Amazon founder Jeff Bezos has received a great deal of credit for
investing in serious investigative journalism and giving the paper the
resources to achieve major “digital growth,” as the press releases say. I
worked (oh so briefly) for eBay founder Pierre Omidyar’s First Look
Media, home to lots of great journalists given the resources necessary
to do important work. I know Omidyar believes strongly and sincerely in
the importance of independent journalism to a free society.
But with Google and Facebook sucking up the majority of the ad money,
going into publishing eventually only makes sense if you have
particular things you want published. I have no doubt that Bezos and
Omidyar believe in the missions of their organizations, but they are
both quite upfront about not wanting to run them as charities. They both
want to “save” journalism as a business. The trouble will come
when the billionaires who think that way discover that, even if they
once had one very good idea that made them very rich, they probably
don’t have the one good idea that will “crack the code” of making it
profitable to run a large and expensive news-gathering organization.
Those who initially decide to fund journalism out of a sense of selfless
civic virtue will get bored or get tired of losing money, leaving only
those funding it for some other, probably political purpose. (The Guardian
is currently engaged in a fascinating experiment to see how long a rich
man’s money and the economic laws of compound interest can be used to
sustain a money-losing, public-interest-serving journalism shop.)...

Over the past six months or so, the dollar has jumped from 39,000 rials to around 49,000 rials.
According to Tasnim News Agency, the police force and the Central Bank of Iran (CBI) initiated a joint operation Feb. 14 to control the foreign exchange market.

Gen. Hossein Rahimi,
Tehran’s chief of police, said Feb. 14, “Following the operation, which
began this morning, 10 money changers were closed down and 16 money
changers were given a warning. So far, 90 middlemen have been arrested.”

He said these events occurred after “joint groups of police forces
and Central Bank experts went to the exchange market to study the
licenses of money changers, buyers and sellers of foreign currencies.”

Rahimi said the operation had been successful and the dollar rate had dropped by 1,000 rials.
While fluctuations in the foreign exchange market persist, parliament
members are starting to protest the Hassan Rouhani administration's and
the CBI’s management of the situation.

Mohammad Reza Pourebrahimi,
the chairman of parliament’s economic commission, said in parliament
Feb. 14, “In recent weeks, due to mismanagement of the foreign exchange
market, our national currency’s value has decreased by 25%, which has a
negative effect on attracting foreign investment and also
has inflationary effects.”...MORE

Wednesday, February 14, 2018

We've seen some analysis that within 5 years Facebook will have enough
data on the human population to be in a position to offer any government
in the world surveillance capabilities on a scale comparable to that of
the American NSA but with more granularity.

Well since then a few stories have come out that relate to the surveillance proposition.

First up, from Hacker Noon, February 10:

Your Facebook data is creepy as hell… and why you should really have a look at it.

Since
2010, Facebook allows you to download an archive file of all your
interactions with the network. It’s a 5-click easy process that your
grandmother can do (more details below).

Inside
the .zip, lies an ‘index.html’ page that acts as a portal to your
personal data. Visually, it looks like an ad-free stripped down version
of Facebook that’s actually quite relaxing.

As
I’m trying to reduce my exposure to social networks, I decided to take a
look at this info. By extrapolating the data of a single individual
(me), I might be able to better apprehend the capabilities of the beast.
In the end, it all comes down to what is tracked and what can be
deduced from that.

I
created my account Friday, September 14, 2007 at 10:59am and all my
actions have been recorded ever since. I feel that for the first time in
history, 10 years of consistent human behavior have been meticulously
gathered, stored & analysed.

Exhaustive photo metadata

Whenever
you post a photo to Facebook, it keeps a record of all the data that’s
attached to it. That seems quite obvious but I didn’t suspect it was so
detailed. Have a look: Camera Maker, Model, Orientation, Exposure, F-Stop, ISO Speed, Focal Length, Latitude, Longitude & Upload IP Address

Abundant log-in & session data points

Every time you open Facebook, the time, location, IP address, browser & device have been recorded. If you’re part of the 1.4B people that use Facebook on a daily basis, they have enough data points to determine your everyday life patterns with great accuracy: home and work address, daily commute, wake up & bed time, travel duration & destination, etc.

Flawless facial recognition

Apparently, Facebook has 232 examples of what I look like.

How does it know? Well, every time you tag a photo, you’re adding to an enormous, user-driven wealth of knowledge and data.
Everyday, billions of people are telling an algorithm what a human face
looks like, from different angles, at different ages and in different
light conditions.

The result? Facebook allegedly said that its image recognition models could recognise human faceswith 98% accuracy & that it could identify a person in one picture out of 800 million in less than five seconds.

Detailed contact list

When
you install Facebook’s app on your phone, you give it the right to see
your contact list. Once that’s done, Facebook keeps ALL your contacts
information forever.

There’s
no sneaky move here: the opt-in process on your phone is actually
pretty clear about that. But seeing the phone numbers, emails &
addresses of everyone you know (or knew) listed on Facebook is a bit
disturbing....